[jnwatson]

ETFs are supposed to hold the underlying asset, just like mutual funds. In the worst case, you are due your share of the underlying asset.

ETNs (which are sometimes lumped with ETFs but are actually distinct products) have counterparty risk since they aren't required to hold the underlying asset. They are unsecured debt securities issued by a bank.

[anjel]

There are precious metal ETFs that are. Distinct from the "physical" gold funds in that they use derivatives to match the price action of the precious metal instead of buying and storing it

[csdreamer7]

Yes, during the silver boom; I saw an article about how silver ETFs were oversubscribed 80 to the actual silver they owned.